Bermuda Preview: A Spyglass On Treasure Island.
In the years that Risk & Insurance has been focusing on Bermuda as an offshore Mecca for reinsurance, insurance, captives, and financial services, the island's propensity for change and reinvention has been remarkable.
Indeed, our annual Bermuda Special Reports have become the spyglass through which we've gotten a closer glimpse of the strategies and success not only of the island's dominant insurers/reinsurers--such as Ace Ltd. and XL Capital--but of such innovative and aggressively growing players as PartnerRe, Centre Solutions, Stockton Re, Renaissance Re, Chubb Atlantic Indemnity, and others. Along the way, the unique government/business partnership that has helped Bermuda thrive as a risk transfer paragon has been illuminated through interviews with its government leaders.
At this point, the pace of change has accelerated, and the stakes are higher for Bermuda's companies and its business leaders. Since last year's Special Report, we have seen Ace expand its global reach--and global challenge--immensely by acquiring the property/casualty business of Philadelphia-based Cigna Corp. At the same time, XL has moved strongly into the broker reinsurance market by acquiring its own large U.S. organization, NAC Re.
Public to Private Players
But while those two Bermuda players may have grabbed the lion's share of headlines, other changes on the island are resounding. In recent months, such government stalwarts as former Registrar of Companies and top insurance regulator Kymn Astwood surprised the business world by becoming president of Arrow Re, the wholly owned subsidiary of Wall Street investment bank Goldman Sachs. Arrow Re is part of Bermuda's new wave of "transformer" companies, which hedge their reinsurance contracts via securitization. And the island's longtime finance minister, Grant Gibbons, also moved into the private sector via an ambitious reinsurance start-up that he has since left.
Meanwhile, continuity of the government's successful partnership with insurers and reinsurers seems assured, with the succession of Jeremy Cox, who had been Inspector of Companies, to the position of Registrar of Companies. In fact, concerns about the recent change in government leadership at the top, with premier Jennifer Smith succeeding Pamela Gordon, seem to have been allayed, as Smith has articulately recognized the importance of insurance and reinsurance to the island. And legislation that seeks to wisely and flexibly regulate the surging issue of electronic commerce, along with the complexities of the protected cell structure for captive insurance companies, is on the horizon.
Success Takes Shape
If anything symbolizes the sheer size of Bermuda as a global player, it may be the ongoing spate of construction that will house the island's fast-growing players. The enormous Ace/XL dual complex at the former site of Hamilton's Bermudiana Hotel is taking massive shape and should be ready for move-in within a year. And as always, there are key executive moves in these companies, what with John Engestrom joining the Ace-owned Tempest Re as its new president and CEO, while at XL, Clive Tobin has replaced Robert Cooney--now at the helm of an imminent insurance venture--as XL Insurance president and CEO.
Meanwhile, the large waterfront complex commissioned as a new headquarters for Centre Solutions and others next to Hamilton's Princess Hotel is even further along, with its classic Bermuda architecture and pastel mocha hue. Moving into this complex, both the Zurich-owned Centre Solutions--which pioneered the concept of finite reinsurance more than a decade ago and has diversified strongly ever since--and the fast-growing Stockton Re, which specializes only in finite reinsurance solutions, will establish higher profiles along Hamilton harbor next year.
Then there's Bermuda's Mutual Risk Management Ltd. (MRM), an innovative hybrid company that arranges insurance coverages for corporations and provides key services to insurers. MRM has shown phenomenal growth in two decades, since it began providing services to smaller corporations that sought to self-insure.
These and other Bermuda players, personalities, and issues will be explored in depth next month, in our Bermuda Special Report. Rely on it for a sweeping survey of Bermuda's brave new business world.
|Printer friendly Cite/link Email Feedback|
|Publication:||Risk & Insurance|
|Date:||Sep 1, 1999|
|Previous Article:||The Reinsurance Sea Change.|
|Next Article:||Taming The Workers' Comp Beast.|